Summary
Technical Indicators are calculations derived from market data such as price, trading volume, or volatility. They can be added to charts to help describe trends, momentum, variability, and other characteristics of past market behaviour.
Indicators transform historical observations into lines, bands, or values that can be reviewed alongside the security’s price chart.
Why they matter
Technical Indicators can make certain features of a price series easier to identify. For example, an indicator may smooth short-term price noise, compare recent gains and losses, or show whether volatility is expanding or contracting.
They can support a consistent chart-review process, especially when the same settings are applied across comparable securities and periods.
How to read them
Each indicator has its own calculation and interpretation. Before using one, check its period, data source, chart interval, and any other parameters. A signal on a daily chart may not have the same meaning on an intraday or weekly chart.
Indicators are usually most informative when reviewed together with price action, trading activity, market context, and company or bond fundamentals.
Things to keep in mind
Technical Indicators are based on historical data. Many are lagging by design, and none can reliably predict future prices or remove investment risk.
Different settings can produce different signals, and several indicators may use similar underlying information. Combining many related indicators can therefore create the appearance of confirmation without adding independent evidence.
An indicator may also be unavailable when there is not enough historical data to complete its calculation.